One of my big goals (notice I didn’t say my “dream”, I want to actually achieve this) is to help close the gender pay gap in my lifetime. As it stands, women still earn about 80 cents on average for every dollar brought home by a man. This is one of the reasons women are leaving their corporate jobs to start their own businesses – to escape the glass ceiling and finally charge what they’re worth. So, when I read the results of a research study indicating that on average, female entrepreneurs earn (or pay themselves) 28 percent LESS than their male counterparts do, I was floored.
What makes this especially concerning are these stats from the survey:
- 70 percent of these women say they went out on their own at least partly because they faced gender discrimination and the glass ceiling in their previous jobs.
- Almost two-thirds believe they can reach their career goals faster by working for themselves than they can as employees.
- 52 percent say that reaching their full potential is just not possible if they keep working for somebody else.
So, it turns out there’s a gender pay gap in the entrepreneurial world just like in the corporate world.
Some survey respondents felt that they weren’t taken as seriously as their male peers and therefore needed to charge less in order to attract customers. However, I think the bigger issue is MINDSET. Here are some practical tips that will allow you to really charge what you’re worth.
Know your competition
The first and most obvious piece of advice is, know your market and the competition. Depending on your business, your competition could be local or if it’s internet-based, you may have competition worldwide. Consider all aspects of your competitor’s offering: product, positioning, quality, experience and value. Julie Murphy Casserly, author of The Emotion Behind Money: Building Wealth from the Inside Out, says “I think it’s important for women entrepreneurs to look at what their competition is charging. People won’t hire you if your fees are too low because the perception is that you must not be as good as your competition.” Another idea is to survey people that fall within your target audience to see what prices they would find fair. You could use a service like SurveyMonkey or if you’re a member of a Facebook group that encompasses your target, you could post an informal survey and get feedback that way. Consider what makes you better than the competition and what sets you apart. These are all things that prove your value and help you to charge what you’re worth.
Consider your relationship with money
What are your thoughts about money? Did you grow up with an abundance or scarcity mentality? If you grew up like I did, being told to turn off the lights if you’re not in a room or not to waste food because there are children starving in Africa, you probably place a lot of value on money. It might be more difficult for you to charge what you’re worth because you’re conscious about budgets, including other peoples. Kudos to you for being considerate, but this is a business. Set your rate or salary and stick to it. Don’t adjust your salary or rate to meet the employer or client’s budget—that’s their job. The reality is that if your client or customer didn’t feel your product or service was valuable, they wouldn’t buy it. So, you’re not cheating anyone when you charge what you’re worth because it reflects the value you’re providing. Think of it as a win-win situation which is ideal. You are providing a valuable service or product in exchange for an agreed upon price.
Calculate the value of your product or service
Consider the value your clients or customers will receive. If you are in a service-based business, remember that you aren’t just charging for your time. For example, let’s say you’re a virtual assistant. The value you provide your clients goes beyond just booking travel, answering emails and updating excel spreadsheets. Your client is paying for your expertise. You’re also saving your client valuable TIME that they could be using on higher-level projects that translate into additional revenue and long-term growth. So, if you’re taking on tasks that would equal 10 hours per week of work at $30 per hour, that’s 520 hours per year (a total of $15,600). How valuable are those hours for your client? If your client is an executive coach and it takes them roughly 40 hours to land one client and that client is worth an average of $5,000 in revenue, that’s 13 clients in one year (and a total of $65,000). Because of you, your client just made an additional $50k in revenue for the year and saved 520 hours! That’s not even considering the fact that you’re making their lives easier by saving them additional stress and frustration. They may even have more time to spend with their wife and kids—how much is THAT worth to them? So, next time you are pitching to a potential client, ask them, “what is this worth to you?” It’s a much more powerful way of positioning your value. (If you’re interested in more information on this topic, check out Marie Forleo’s video on the “mattress method”— it’s brilliant!)
Have confidence and believe in yourself
Ultimately, you need to have confidence and believe in yourself and what you have to offer. After all, if you don’t, how are you going to convince someone else to buy your product or service? The value that you are giving your clients or customers far exceeds the amount you charge. Just think about the time, money, and effort your clients would have to spend in order to solve their problem on their own (assuming they could). Once you value your own expertise, your clients will too.
So, go out there boss ladies and give yourself a raise! You’ve earned it.
Caroline is a business & life coach who enjoys helping people escape their 9-5 jobs so they can find fulfillment working for themselves. Visit CorporateEscapeArtist.com to learn more.